Number of the Week: Rise of Single Moms Drives Down Overall Income

$81,455: The median 2012 income for married couples with children, up 16% since 1990 after adjusting for inflation.

New data this week showed once again that it’s been a rough couple decades for the American middle class. Median household income barely budged in 2012, and is actually lower, after adjusting for inflation, than it was in 1989. “This isn’t a lost decade for economic gains for Americans,” the Washington Post’s Neil Irwinwrote on Tuesday. “It is a lost generation.”

But the stagnation of median income reflects not just the uneven nature of the economic recovery but also the changing makeup of American society.

Median income is often described as the amount earned by the “typical” family. That’s true, but it’s also a bit misleading. Change in median income compares the typical household of the past to the typical household of today — and the typical American family looks a lot different now than it did two decades ago. Back then, Americans as a whole were younger, whiter and less educated than they are today.

Put another way, median income tells us how the Joneses of the past compare to the Johnsons of today. But it doesn’t tell us much about how the Joneses themselves did over the past 20 years.

To keep up with the Joneses, we would need to track individual families over time — what researchers call a “longitudinal survey.” That’s impractical for a survey as large as the one used to produce income data, the annual Social and Economic Supplement to the monthly Current Population Survey. But the Census Bureau does provide median income data broken down all kinds of ways: by race, sex, age, marital status, work history and more. Together, the tables give a much more complete picture of the country’s economic progress — and lack of it — over the past two decades.

Take families with children, for example. The median income for all families with children under 18 was just under $60,000 last year, up about 3% since 1990 after adjusting for inflation. But what might once have been considered the “typical” American family — a married couple, living together, with at least one child under 18 — has done quite a bit better: Their median income was $81,455, up nearly 16% from 1990.

The trouble is, such families have become significantly less common over time. In 1980, married couples made up 80% of all families with children. A decade later, that figure had fallen below 75%. Today, it’s less than two-thirds. The number of families headed by single moms — any mother with no spouse present, regardless of whether she has a live-in partner — has increased more than 30% since 1990, to more than 10 million.

In terms of income growth, single moms aren’t actually doing much worse than their married counterparts — their median income is up 14% since 1990, nearly as much as for married parents. But they earn far less in absolute terms. The median income for a family headed by a single mother was $25,493 in 2012, which means roughly 5 million single mothers earn less than $25,000 a year.

The stagnation in parents’ incomes, in other words, is due in significant part to the changing nature of the American family. Since single parents make much less than married couples, more single parents means a lower median income for all parents. (One important caveat: The Census’s definition of “family” exaggerates this effect because it includes only the income of married partners. Looking at household income, which includes the earnings of everyone living together regardless of their relationship, would mitigate the effect somewhat, but the government doesn’t provide as detailed a breakdown of household earnings.)

A similar pattern shows up in other areas. Hispanics have seen their incomes rise about as fast as those of other ethnic groups over the past couple decades. But they still earn much less, even as their share of the population is growing rapidly. That tends to push down the overall median. The same goes for older Americans, who are making up an ever-larger share of the population. Those over 55 have seen relatively strong income gains in percentage terms but earn less in absolute terms than those in their prime working years.

None of this means that both short- and long-term economic trends aren’t taking a serious toll on many families. The decades-long disappearance of good jobs for less-educated Americans comes through loud and clear in the data: The median income for families headed by someone with only a high school diploma has fallen 9% over the past 20 years, and it’s fallen even faster for those who never completed high school.

The recovery, meanwhile, is leaving many families behind. Married couples with both partners working full-time have made up all the ground lost during the recession and even made modest gains. But the share of families with two full-time earners, which had been rising for decades, fell during the recession and still hasn’t rebounded. And families with just one full-time earner not only make far less, they’ve seen smaller income gains during the recovery.

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